Achhe din for advertising and marketing fraternity in 2016?

Like the curate’s egg, for the advertising and marketing services fraternity in the country, the year 2015 was good in parts. Spends by start-ups and e-commerce players, as well as the various sporting leagues, ensured that cash registers were ringing for most of the year. Forecasts by media agency networks like ZenithOptimedia, IPG Mediabrands (by its research arm Magna Global) and by GroupM (on a global level) paint a healthy story for India 2016. It’s 13 per cent as per ZO, 15 per cent by GroupM and 18.4 per cent by IPG. To discuss how spends have been in 2015 and how they will be spread out next year, dna of brands and BrandStand (the weekly show on Zee Business) conducted the first edition of Conversations last week at Mumbai’s Sofitel Hotel with Anupriya Acharya, Group CEO, ZenithOptimedia, Anuradha Aggarwal, CMO, Marico, Nandini Dias, CEO, Lodestar UM and Shireesh Joshi, Head, Strategic Marketing, Godrej group, who spoke to Pradyuman Maheshwari and P Karunya Rao

It’s that time of the year when you not only look at the year ahead but also take stock of the months that have passed. We would like to start by asking the marketers on our panel how 2015 has been in terms of adspends. 

Anuradha Aggarwal: It has been a good year from the perspective of the media world and the options we’ve had. It has been slightly tough from the buyer’s perspective because it has been an inflationary year. As marketers, we have seen increased spends and of course there is also an increase in advertising spends across different media. 

Shireesh Joshi: For us, too, it has been a good year. I won’t say there has been any breakthrough or rapid departure, but across the group, when you put it all together, it has been a pretty stable year.

And what do our media agency heads think?

Anupriya Acharya: We echo what they said. There has been double-digit growth across, though some categories have grown faster than others. The media darling, e-commerce, has grown almost 90 per cent, but other sectors – like auto and FMCG – have also shown a growth of about 10 per cent. The sub-categories may vary, but at an overall, they have grown by over 10 per cent. Food as a category has also shown growth. In fact we find mobile and telecom have been mostly flat. 

Nandini Dias: Adding on to what Anupriya said about double-digit growth, we also see growth in the builders’ category. A number of infrastructure projects are stuck, hence a lot of advertising has happened there…you see many billboards and property-related television ads. In the last year, companies in logistics and processes have seen growth too. In automobiles, this year has seen a lot of petrol vehicles [being launched] which is why the auto companies have grown.

Anupriya, both the real estate and auto sectors are facing a bit of a slump. Do you think these will fuel the adspends that have got ZO to predict a 13 per cent growth?

Acharya: Yes, we have taken all of them into account. If you look at the sales figures from April to September, clearly there is a growth of 6.5 per cent compared to four per cent last year. Some months have seen double-digit growth, others have seen low, single-digit growth. Commercial vehicles are also showing growth, so it’s not as if the sector is not doing well. Second, advertising is not necessarily linked only to sales. When there is a slump, we have often seen a greater need for advertising, which fuels adspends. 

Shireesh, given the changing media landscape, are traditional media entities innovating more and providing better deals etc?

Joshi: Deals have always been a part of the landscape, but nowadays markets are looking for much more than just deals. I think the bulk of mass spends is now taking place in the fringes, working with creating content for digital and mobile. Marketing is actually exploring a lot of areas outside just the big deals of the big networks.

Do you think more and more marketers are getting into what is called content marketing instead of the traditional modes of advertising?

Aggarwal: Yes, it’s about knowing your consumers enough to know what kind of content they will consume. There is a glut in every media, whether it is the internet, social media or mobile, and the consumer is making choices on the fly. [As marketers] we are learning as we go, and there are data systems which help us understand what consumers want and buy. But finally, it is a little bit of creativity that is helping us create content. 

Anuradha, are marketers from the FMCG sector like yourself, looking at the content marketing space?

Aggarwal: Yes. By default, media and digital companies have access to data, and if you’re able to interpret it, you can figure out what kind of content is going to work. You can figure through search volumes and keywords what trends will work. Increasingly, we are seeing marketers looking at content to have conversations with consumers rather than through the 30-second TVC or half-page ad, but we find more marketers going through the media and digital agencies.Marico has a brand called Saffola, which has been in the market for a long time. We have recently introduced Saffola Masala Oats, which has taken the market by storm. 

We started a content hub called Fit Foodie which recommends healthier recipes to make with or without our oats range. Now we offer 300 video recipes, and consumers can Whatsapp the recipes to themselves. So it took a little bit of understanding to see what kind of recipes would work, based on what consumers are searching for, in the digital world. 

Talking of technology, Shireesh, the Godrej group introduced the FreeG helpline. How did that missed call service work for you?

Joshi: It was a return path where you do traditional advertising, people call the number back and they get a menu and make selections. The goal was to accelerate people from awareness to purchase. The mechanism would allow them to investigate, send the pin code of the nearby store and get a brochure. Or if you are searching for property, select a city, a project etc. We have got more than three lakh leads and several crores of business. But all that data punching has also given us rich insights into how people consume media, so we are able to judge which creative works for us.

Dias: Just to add to that, websites where the company used to provide the traditional vision-mission statements, have all turned into content pieces. And what they do on the website makes a big difference. For instance, Coke Studio is one of the largest media properties we have created in the country in the last couple of years. So you start off using one channel, and then put it on other devices and media, and almost monetise it. For Amul, we create recipe books, get videos ready…

There is so much conversation around digital and how it has immense potential. But the spends are still marginally low?

Dias: If you see some of the projections of Magna Global, in another six years, internet and mobile will be 20-25 per cent of the market, which may be equal to print. Everything will become digital.

But then the market share is still in single digits, right? 

Dias: Currently, yes

Joshi: You know, that’s not the right way of looking at it. When you look at the totality of all advertisers, all media and then see at the percentage, it might not look like it is shifting. But if you watch the newer products that are coming out, then you will find some of them are only digital. So you will find that Godrej Nature’s Basket is almost entirely digital. Property is almost entirely digital. If you look at our traditional businesses then, yes, you may find them in single-digits percentages. What’s happening is that the digital world is actually spawning new formats, new businesses, and because it is much more focussed on target, all niche businesses are moving lock, stock and barrel to digital. Mass media is still more efficient for mass products to go in a mass fashion, not digital. If you ask where the growth is taking place, I think the newer businesses, the niche businesses they are all going over to digital. And I think the total percentages seems to hide that a little. That’s probably the right place to look.

Anuradha, do you think there are enough consumers in the digital space to be effective for advertising?

Aggarwal: If you go by the numbers, it looks like the reach of digital is multiplying by 2x every year. When I was in the telecom sector, we would talk about the internet reaching 75-100 million people, and today it’s at 150 million in just two years. The reach itself is now competing with other media. Combine that with the ability to identify the medium and the people you want to talk to, and it becomes a really valuable tool. When we are talking about hair grooming products like gels which are selling to 15 to 20-year-olds, you know digital is the right medium. If I want to reach a woman sitting in rural Bihar, then I would use a mobile phone. 

Do you see spends increasing for digital and social media? 

Acharya: Definitely. We had published a global study on new media based on the behaviour of users. Of the time spent on the internet, the highest amount will be on mobiles, which will be higher than the sum total of all other gadgets used to log on (like a tablet or laptop). And this trend is led largely by consumers in the 16-24 age group. As the size of this population increases, the shift will become [more pronounced]. 

Dias: We are betting on search. Some part of the prediction is that while social will be a part of the conversation, till today it was all about likes and impressions which were the basic matrix. These were not very performance-led. So going forward I think both search on desktops and mobile will be one large component and you know what you search and what will be served, will be fuelled by programmatic [compulsions]. Because of the wealth of insight that are there, you can’t touch a thing without somebody capturing it today, no matter what device you use. Even if it’s a simple mobile, everything senses what you are up to, right? So that programmatic buying will actually feed into the search that you will be searching and so give ads. So social, which was just likes till date, in a way will become irrelevant.

One of the forecasts is that by 2020, spends on digital will equal that of print. The ZenithOptimedia report also says that by 2018, you will have advertising on the internet overtaking that of television. I know that is not going to happen in India by 2018, but do you see this happening at all?

Acharya: To a certain extent, it depends on the ecosystem. The 4G ecosystem is growing extensively in the world and people are going to start consuming media on their phones. Increasingly video consumption is going to go up, so it is not impossible. It is a question of speed, scale and infrastructure. But it will get there. It will definitely become bigger than print, it can become bigger that TV. It is bigger than or larger than the 4th largest channel now, in terms of viewership. We need matrix to compare television with digital, but this is definitely possible.

What do you think about spends on television overtaking the internet by 2018 globally?

Acharya: If you are talking specifically about India, I think it will take slightly longer than that. In India, you will find that the digital part -- even though it is growing between 30 and 40 per cent through the year –will grow exponentially given the infrastructure and the [launch of] 4G, as we talked about earlier. It’s going to be further fuelled by the fact that all the key partners here are also gearing up for it. Vernacular, another big thing, will drive it further. We have seen acceleration in all media when good vernacular content has been made available. So there are lot of things that are going to fuel [this growth] and it is definitely going to reach a big chunk. Will it beat a TV by 2018? I have my doubts, and that is largely because TV in India is growing as well. Unlike some of the Western markets where TV and print have plateaued out. 

Nandini, do you think traditional media is doing anything to counter this threat of digital? 

Dias: Oh yes. Television is doing it. So is print, by launching apps which you have to download to read the newspapers. Another conversation doing the rounds is whether traditional television will mean anything, or whether the properties will take precedence. For example, you know about shows like House of Cards or Big Brother, but you don’t know which channels they play on. So there are likely to be fewer and fewer channels. Take YouTube which offers one lakh million videos. One could call YouTube the biggest channel of them all, since it’s like television. It’s all going to be content marketing and these channels and names are actually going to be present across devices. So it’s content and devices, rather than specific channels or newsprint.

Given the constant pressure from stakeholders (and company managements), as marketers what are your expectations from media entities and media agencies? And do you think traditional media is doing enough to safeguard its interest against digital? 

Joshi: The expectation from senior management or owners is always that marketers will figure out the best way to market their products. So the onus is on us. The question is not which media or which entity to reach out to. People will always want news, people will always want entertainment. So if one entity doesn’t do work, there will always be somebody else. Marketers will always go where there is a volume of audience. The challenge for us is not which media entity to figure out, but which media landscape, as viewing patterns change with people interacting with two or three devices. What media or what content do you create for them? Our challenges lie more in the content, in the message and the communication to be delivered, rather than worrying about which media entity is going to deliver it. 

Aggarwal: Someone once told me that relevance is revenue. So one of the key challenges is to make sure we are relevant to the consumer we are speaking to. It sounds very basic but in the changing media world that can sometimes be a challenge if you want to stay ahead of the curve. As far as media choices are concerned, I am hoping that our media partners are doing their best. And that is getting us the best media choices. 

Let’s hear from the media agency folks. What is it that you expect from marketers and from clients, ensuring that they get better sale in for their services and products?

Acharya: The market is changing very fast. The consumer markets are no longer linear, and so this entire ethos of earlier, where there was a very structured way of working -- wherein a creative agency or a media agency knew what it had to do, and where you increased PR agency activities and then increases digital agency activities – has changed. Now it has increased to search marketing and content marketing agencies and such. From that end, a lot of marketers talk about this whole integration -- having a view on this single consumer journey. However with the briefs that come to the agency, we find that quite a few marketers are still a little old world, in that the brief to the creative agency goes separately and the media agency goes separately and digital agency possibly separately as well. I think it will help immensely if marketers try and consolidate whoever they deem is the right partner, because I think across agency networks, there is a clear movement towards ensuring that there is specialisation and there is simplification as well. To be able to provide better services to marketers.

Dias: The first question that worries us is with insights coming from a lot of places these days, and with more and more data being mined, it seems like we don’t know what to do. Because to solve some of these problems we need technology and investment. I don’t think advertising agencies who used to traditionally mine insights and come up with a proposition and solution, have the money to invest in technology and hypotheses. Each marketing company comes out with its own hypothesis and solution, and thinks it has done a superb job. Which is why you see so much of the creative or the solutions which don’t even talk to each other. But is there a common hypothesis across everything and is that being answered? Frankly, I have my doubts. Second, why have you actually got so many specialisations and is that a good thing? I would put 10 more because I don’t think advertisers are happy to actually pay you for the services [offered] and it is assumed that everything is included in the fee. That doesn’t work for us because if you have SEO, they need different people and have different specialisations. 

What is the one thing according to you all that we should watch out for in advertising and marketing in 2016?

Dias: 4G. I think this is going to make things dramatically different in the mobile space.Acharya: So I agree 4G and more important is the influence it is going to have on the new age businesses. So we find in the last two years only there has been a multiplication of all these marketers who are primarily based on digital only. To get data currently already there are about 900 advertisers on e-commerce. I think it will double or triple maybe next year when 4G releases. 

Joshi: I think the market will mature and I think from seeing episodes and events, we will start seeing campaigns on digital. 

Aggarwal: I think the challenges remain the same that they have been in the past. One of the key challenges for marketers has been to cut through in a really cluttered environment and new industry is cluttering the environment even more, and so it’s for traditional marketers to be even more exciting and be a part of the conversation on a regular basis. This will improve in the digital world, so I think that’s something that will be very important.

Anuradha, given the fact that you have a telecom background, tell us whether you think 4G is going to grow the market.4G is going to grow the market.

Aggarwal: I think it is in the order of things to first explode and then converge. This is a place of explosion of the e-commerce world, so it is going to continue to explode a little while longer before it starts converging. So we will see a lot of activity. With 4G, we were talking about the device universe. The device universe has to catch up, the infrastructure takes time to set up, so it is going to make a difference in some parts of the country. 3G did make a difference in some parts of the country and in places where we have seen explosive smartphone growth, we have also seen explosive content consumption. We have seen that 50 per cent of people looking at their Facebook feeds only on their mobile phone, and all of that is making a difference to the media landscape. So I think it is a classic pyramid -- or maybe a diamond of sorts -- where some people are doing some things, and a lot and those guys will have to be spoken to in a slightly different way and some others will continue to do the things the way they were, in which case they will look for efficiency in those media.4G, we were talking about the device universe. The device universe has to catch up, the infrastructure takes time to set up, so it is going to make a difference in some parts of the country. 3G did make a difference in some parts of the country and in places where we have seen explosive smartphone growth, we have also seen explosive content consumption. We have seen that 50 per cent of people looking at their Facebook feeds only on their mobile phone, and all of that is making a difference to the media landscape. So I think it is a classic pyramid -- or maybe a diamond of sorts -- where some people are doing some things, and a lot and those guys will have to be spoken to in a slightly different way and some others will continue to do the things the way they were, in which case they will look for efficiency in those media.

Do you think e-commerce will continue to dominate mediaspends in 2016?

Dias: Oh yes. So many more of them are launching. In the last two months, the number of investors who actually invested in these companies is large. There is so much activity happening. So yes, 2016 is going to be the year of 4G and start-ups. 

Acharya: I agree totally. So e-commerce is largely driven by the fact of easier access so there are consumers on the rise on smartphones, which is then driving sales of smartphones as well. We spoke of 4G and more than anything else, there is an exponential growth in businesses which is happening on these platforms, so I think they are continue to grow in 2016. 

Joshi: E-commerce is important for us as well. As a manufacturer, we have our own e-commerce activity. So one part is participating in the marketplace, but Nature’s Basket for example, has its own portal, as does Interio, the furniture shop. Part of this has to do with the customised offerings that you have, which you can’t just distribute in big channels, and part of it has to do with being able to portray your brand in completeness. Which is not possible on someone else’s portal. So I think for a variety of reasons, even as a manufacturer, it continues to be important and will continue to participate. From an industry standpoint, yes, I think that the story hasn’t played itself out. As a multiple player, it is still jostling for customers and a customer base will continue with the activity there. About 4G, I am not so sure. I think back to the time when 3G started and how much time it took to gather momentum. Yes, the story will play out next year but I’m not sure whether it will play a big role in the industry’s spends next year itself.

Catch the Conversations on Youtube in four parts: